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Chrome File Edit View History Bookmarks People Window Help Homewi × Secure https://edugen.wileyplus.com/edugen/lti/main.uni Weygandt, Accounting Principles, 12e PRINTER VERSION BACK NEXT T RESOURCES Problem 16-4A EWORK Heidebrecht Design acquired 25% of the outstanding common stock of Quayle Company on January 1, 2017, by paying $854,000 for the 42,700 shares. Quayle declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2017. Quayle reported net income of $390,500 for the year. At December 31, 2017, the market price of Quayle common stock was $26 per share. Question 07 16-2 16-5 Your answer is partially correct. Try again. re sults by Study Prepare the journal entries for Heidebrecht Design for 2017 assuming Heidebrecht Design cannot exercise significant influence over Quayle. (Use the cost method and assume that Quayle common stock should be classified as a trading security.) (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) DateAccount Titles and Explanation Debit Credit Jan. 1 : Fair Value Adjustment-Available-for-Sale 854000 Cash 854000 Mar. 15 Cash 12810 Dividend Revenue 12810 une 15 Cash 12810 Dividend Revenue 12810 Sept. 15Cash 12810 23

Explanation / Answer

Journal entry

Stock investments

Dividend Revenue

1110200

51240

900385

0

1. 42700*26 = 1110200

2. 12810*4= 51240

3. 854000+(390500*25%)-51240 = 900385

Date account titles and explanation debit credit Jan. 1 stock investments 854000 Cash 854000

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